Ambac(AMBC) - 2024 Q2 - Quarterly Report

Financial Performance - Net premiums earned for the three months ended June 30, 2024, increased to $33 million from$15 million, representing a 120% growth year-over-year[9]. - Total revenues and other income for the three months ended June 30, 2024, reached $105 million, up from$62 million, marking a 69% increase compared to the same period last year[9]. - Net income attributable to common stockholders for the six months ended June 30, 2024, was $19 million, a significant recovery from a loss of$47 million in the same period of 2023[9]. - Total expenses for the three months ended June 30, 2024, were $103 million, compared to$73 million for the same period in 2023, reflecting a 41% increase[9]. - The company reported a pretax income of $2 million for the three months ended June 30, 2024, compared to a loss of$11 million in the prior year[9]. - Basic net income per share attributable to common stockholders for the three months ended June 30, 2024, was $(0.02), an improvement from$(0.29) in the same quarter of 2023[9]. - Total revenues for the six months ended June 30, 2024, were $207 million, an increase from$120 million for the same period in 2023, representing a 72.5% growth[55]. - Net premiums earned were $66 million for the first half of 2024, compared to$29 million in the same period of 2023, reflecting a 127.6% increase[55]. - The company reported a pretax income of $27 million for the first half of 2024, a significant improvement from a pretax loss of$40 million in the same period of 2023[55]. - The total comprehensive income (loss) for the three months ended June 30, 2024, was a loss of $175 million, compared to a loss of$209 million for the same period in 2023[174]. Assets and Liabilities - Total assets as of June 30, 2024, decreased to $8,184 million from$8,428 million as of December 31, 2023, representing a decline of approximately 2.9%[8]. - Total investments decreased to $2,632 million from$2,664 million, a reduction of about 1.2%[8]. - Long-term debt increased slightly to $515 million from$508 million, a change of approximately 1.4%[8]. - Stockholders' equity increased to $1,419 million from$1,415 million, reflecting a marginal increase of about 0.3%[8]. - Total financial assets amounted to $6,626 million as of June 30, 2024, a decrease from$7,022 million in the previous period[84]. - Total financial liabilities were reported at $5,258 million, slightly down from$5,474 million[84]. - The total gross loss and loss expense reserves as of June 30, 2024, were $762 million, compared to$724 million as of June 30, 2023, reflecting an increase of 5.2%[125]. - The ending balance of the premium receivable allowance for credit losses was $3 million as of June 30, 2024, unchanged from the previous year[121]. Investments - The amortized cost of fixed maturity securities was$2,078 million as of June 30, 2024, with an estimated fair value of $2,043 million[60]. - The company holds$240 million in residential mortgage-backed securities with an estimated fair value of $253 million[60]. - The company has a diversified investment portfolio, including municipal, corporate, and foreign obligations, with a total amortized cost of$1,737 million[60]. - The total fair value of fixed maturity securities was $1,113 million, with gross unrealized losses of$77 million[63]. - Total equity investments in pooled funds increased to $533 million as of June 30, 2024, up from$463 million at December 31, 2023, representing a growth of approximately 15.1%[75]. - The fair value of high-yield and leveraged loans products was $89 million as of June 30, 2024, compared to$39 million at December 31, 2023, reflecting a significant increase of 128.2%[75]. Cash Flow - Total cash provided by operating activities was $32 million for the six months ended June 30, 2024, down from$101 million in the same period of 2023[14]. - The company reported net cash used in investing activities of $120 million for the six months ended June 30, 2024, compared to cash provided of$489 million in the same period of 2023[14]. - Cash, cash equivalents, and restricted cash at the end of the period on June 30, 2024, were $97 million, down from$309 million at the end of June 30, 2023[14]. Reinsurance - Reinsurance recoverable on paid and unpaid losses rose to $277 million from$195 million, marking an increase of approximately 42.1%[8]. - The company ceded approximately 70% or more of its gross liability under all policies issued to capacity providers through quota share reinsurance agreements[134]. - The allowance for credit losses is based on ongoing reviews, with the top three reinsurers representing 66.1% of total reinsurance recoverables on paid and unpaid losses as of June 30, 2024[137]. Legal and Regulatory Matters - The company is involved in various legal proceedings, including litigation related to RMBS transactions, which may impact its financial position[192]. - The company is currently awaiting decisions on several pending litigation cases, including those related to student loan trusts and claims against the Puerto Rico government[190][201]. - The company has complied with all regulatory inquiries and requests for information regarding ongoing investigations[193]. - The company’s litigation matters are not expected to materially impact its operating results or financial position, although adverse outcomes could be material[196]. Miscellaneous - Ambac's liquidity and capital resources were discussed, highlighting the importance of maintaining adequate cash flow to meet financial obligations[6]. - The company is evaluating the impact of new accounting standards on its financial statements, with early adoption permitted for certain standards[44][48]. - Ambac's management and Board have approved the sale of Ambac Assurance Corporation, pending shareholder and regulatory approvals[27].